The SplitTrader.com Sunday 03/04/2001 2 of 2
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In This Candidate Newsletter:
=============================
Watch List
Plays - New - Updates - Drops
Monday's Candidate Play-of-the-Day -DGX
Weekly Play Results (02/25 - 03/03)
=============================
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==========
Watch List
==========
The following stocks are on our radar screen. We are watching
them for further developments before we add them to our In Play
List.
- SPLIT RUN CANDIDATES TO WATCH -
CAH - Cardinal Health Inc. $98.00 -2.10
WHY WE LIKE IT: CAH appreciated 60% from March to October of
2000. It has since slowed its rapid ascent, but still remains in
a healthy up trend. The 50-dma has offered support over the last
month and CAH has held up well even through downturns in the S&P
Health Index (HCX.X). In addition, the RSI is indicating that
CAH has plenty of upside potential before becoming overbought.
POTENTIAL TRIGGER EVENT: We would like to see CAH close above
$105 on volume of at least 1.4 million traded before initiating a
play in CAH.
SUNDAY'S UPDATE: CAH continues to base and churn around the $100
level. On Friday CAH lost more ground and is now just a point
away from being dropped from the Watch List. However, we will
remain patient and see if CAH can again rally closer to our
trigger point next week. We will continue to watch CAH as long
as it can hold above its 50-dma, currently at $97.05.
Chart =
===
SBL - Symbol Technologies, Inc. $46.00 -0.35
WHY WE LIKE IT: The weekly chart on this wireless scanner
manufacturer shows that SBL has broken through its long-term down
trend line and has recently formed a loose consolidation pattern
between $40-$50. The daily chart indicates that SBL has found
support at its 50-dma at $40 and that its MACD is about to turn
positive. The stock has room to run once initial resistance at
$50 is breached.
POTENTIAL TRIGGER EVENT: If SBL can close above $50 on volume of
at least 1.5 million shares, we will move SBL over to our Current
Play section. If this occurs soon, the 50-dma should be
simultaneously breaking through the 200-dma, a very bullish sign.
SUNDAY'S UPDATE: SBL was turned back by its short-term down trend
line on Friday. However, the good news is that is held onto most
of its big gains on the week. Going into next week we will see
if volume can continue to build and if the 10-dma at $44.50 will
continue to offer support. We will monitor SBL so long as it can
continue to close above $40, the bottom of its base pattern.
Chart =
- SPLIT CANDIDATES TO WATCH -
EXPD - Expeditors International $55.75 -2.50
WHY WE LIKE IT: This logistics company has recently pulled back
from a high of $60 on very low volume averaging half of normal
volume. This may be a good sign that the stock is consolidating
and getting ready to challenge the $60 once again. In addition,
the MACD has just turned positive and OBV is getting ready to
break to new highs. The stock has been in a strong up trend
since October of 1998, indicating that it has good institutional
sponsorship.
POTENTIAL TRIGGER EVENT: A close above $60 on volume of at least
600,000 shares will earn EXPD a spot on our Current Play list.
SUNDAY'S UPDATE: EXPD did break, as we expected, but it broke
south instead of north. This happens from time to time and this
is precisely why we wait for trigger points. With EXPD just
$0.50 away from our bail point, we don't anticipate much
improvement out of the stock, but nonetheless will wait until our
exit point of $55.25 is violated before junking EXPD.
Chart =
===
THC - Tenet Healthcare $45.50 UNCH
WHY WE LIKE IT: This ol' Splittrader favorite is once again
getting ready to break out. We like this stock because it is a
safe haven in tough times and holds its own when things in the
market get better. It has been basing at the $45 level and has
bumped up against $47 twice on good volume. We have also noticed
that the 10-dma has been offering excellent support as the stock
moves sideways. Finally, it has been steadily been putting in
higher lows, another sign that buyers are starting to step up.
POTENTIAL TRIGGER EVENT: We need the stock to close above $46.75
on volume of at least 2 million shares before we move THC to the
Current Play list. Should the stock hit this level, the MACD
should be simultaneously issuing a buy signal, which of course is
usually a good time to be entering a trade.
SUNDAY'S UPDATE: THC treaded water on Friday. The stock
continues to coil around the $45 level. It has certainly had a
tough time closing above $46. The MACD has gone negative and the
OBV is starting to trend down. Neither of these are good signs,
however THC has turned around from these conditions recently so
we will continue to watch the stock as long as it can hold $43.
Besides, we are only $1.25 away form our trigger point.
Chart =
===
WFT - Weatherford International $54.00 +1.65
WHY WE LIKE IT: This new watch list stock showed excellent
relative strength throughout 2000 and is still holding up well in
2001. This, in part, is due to the fact that it is an equipment
supplier to the high-flying oil drillers. Its chart is chock-
full of bullish formations. Going back to April of 2000, the
stock gapped higher by $10 on very strong volume. It then
proceeded to come back and fill the gap in December (healthy
price action), with the bottom of the gap holding as support. In
filling the gap, the stock had formed a cup, followed by a handle
formation. WFT broke out of its handle on 2/5/01 (more bullish
action) and according to the depth of its cup, looks poised to
challenge the $65 level in the near future.
POTENTIAL TRIGGER EVENT: We need WFT to breach $55 (the top if
its recent base) on volume of at least 1.5 million shares before
we will move it over to our Current Play list.
SUNDAY'S UPDATE: WFT bounced off slight oversold levels on Friday
to close above its 10-dma for the first time in a week. It did
so on good volume of 1.4 million shares, roughly its three-month
average. With this move, the MACD is starting to roll positive
and we are now just $1.00 away from adding WFT to our Current
Play list. We will probably need volume to pick up a few ticks
in order to get us over resistance at $54.50. On the downside,
we will watch WFT as long as it can keep closing above its 40-
dma, currently at $49.73.
Chart =
- MOMENTUM STOCKS TO WATCH-
UVV - Universal Corporation $38.09 +0.33
WHY WE LIKE IT: UVV has a hand in everything that is currently
working in the market: tobacco, agriculture and building
supplies. It has been on a nice up trend since April of last
year. Recently, the stock took a 15% dip on lower volume and
then subsequently formed a "v" bottom. We are anticipating the
formation of a brief consolidation base followed by a move
through the previous highs. Though UVV is currently overbought
as measured by its stochastic, this condition will be relived as
the stock bases. Just a heads up, this is another one of those
low volume stocks, so volatility may be an issue.
POTENTIAL TRIGGER EVENT: We will be patient and wait until the
stock can advance through and close above its previous high of
$38.75 on volume of at least 75,000 shares before moving it over
to our current play list.
SUNDAY'S UPDATE: UVV rallied with its tobacco brethren on Friday
and is now within $0.70 of our trigger point. More general
NASDAQ weakness next week may be all UVV needs to get it over
resistance at $38.50. The stock continues to put in higher lows
and volume is starting to build on up days.
Chart =
===
FRE - Freddie Mac $66.80 -0.88
WHY WE LIKE IT: FRE is due to benefit from a lower interest rate
environment and an increase in refinancing and new mortgages.
FRE has just finished forming a cup pattern after rocketing over
37% since a breakout in September. The MACD just turned positive
and the OBV has remained strong, meaning FRE may be poised to
take out its old high of $70. We are anticipating FRE might see
the same type of pop that fellow financial stock, USA Education
(NYSE:SLM), saw over the last month since the charts are very
similar.
POTENTIAL TRIGGER EVENT: FRE needs to prove its meddle to us by
closing above $70 on volume of at least 4 million shares traded
before we will move it over to our Current Play list.
SUNDAY'S UPDATE: Our new Watch List stock took a pause within its
four-day old up trend on Friday. However, with its recent move
higher, its MACD has issued a buy signal and it appears as if the
50-dma is going to offer good support. Early in the day the
stock broke through resistance at $67.70, only to fall back on
lighter volume. We will look for follow through on the upside
next week, accompanied by support at the 10-dma at $66.50. On
the downside, we will watch FRE as long as it can continue
closing above its 50-dma, now at $64.20.
Chart =
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=====================
SplitTrader.com Plays
=====================
The PLAY LEGEND:
SplitTrader.com Candidate Play Recommendations.
Candidate Play-of-the-Day is our number one candidate
recommendation for the following trading day.
Updates are just that - updates on continuing plays
New plays are brand new for the newsletter.
Drops are closing plays that we feel have lost the advantage.
You will see:
Stock Symbol, Company Name, Closing Price, (change for the week)
Picked at date and Change since picked
Terms:
BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average
At the SplitTrader.com website, we have comprehensive profiles
for each stock that we are playing or have played in the past, as
well as hundreds of others. Please take the time to visit the site
to view the profile of the stock(s) you wish to learn more about.
==================================================================
=========
NEW PLAYS
=========
NEW SPLIT RUN PLAYS 03/04/01
============================
None
NEW SPLIT CANDIDATE PLAYS 03/04/01
==================================
KRI - Knight-Ridder, Inc. $60.75 (+2.71)
Stock market investors have been engaging in a frantic search to
find any stock in which they can confidently invest. We have had
success recently finding companies outside of the technology
universe that have been rallying higher on good momentum.
Knight-Ridder, our latest potential winner, is a publisher of
daily newspapers that also manages a news bureau information
wire. Some of the company's better known properties include The
Philadelphia Inquirer, The Miami Herald and The Detroit Free
Press. Silicon Valley denizens have long been familiar with
another one of the company's papers, The San Jose Mercury News.
KRI also created SiliconValley.com, which is partnered with the
San Jose Mercury News. These two KRI properties are highly
respected for their ability to report about the cutting edge
developments emanating from the technology center of this
country. KRI was one of only a handful of stocks to establish a
new high on Friday. Momentum traders may drive KRI much higher
if the stock can trade above resistance of $61.25 on Monday with
first hour volume over 250,000 shares. A positive start to the
week will also likely result in a buy signal being triggered by
the MACD. There is also resistance at the all time high of
$65.00, which was established in October of 1999. Considering
the dearth of momentum trading options in this market, it is not
surprising that KRI's Money Flow and OBV are very strong. We see
excellent support being provided by the 20-DMA of $59.25. We are
additionally encouraged by the fact that the RSI has plenty of
room to the upside before the stock would be considered
overbought.
Picked on March 4th @ $60.75
Change since picked +0.00
Stop Loss @ $57.00
Chart =
NEW MOMENTUM PLAYS 03/04/01
============================
PHCC - Priority Healthcare Corporation $42.50 (+4.12)
Priority Healthcare Corporation is a national specialty pharmacy
and distribution company that provides specialized pharmaceutical
services for patients with chronic diseases or genetic disorders
that require high-cost, complex therapies. This weekend we
welcomed PHCC to our list of momentum plays on the heels of the
stock achieving a new 52-week high of $43.75 on Friday. Let's
back up a bit to the events leading up to the new high. On
February 22nd PHCC released their most recent earnings report
which came in one cent above expectations. Since that date PHCC
has risen 22% and now looks poised to move even higher. This has
been a great year for investors of PHCC, since December the stock
has nearly doubled in value; from a mid-December low of $22.89 to
Friday's high of $43.75. The only dark cloud hanging over PHCC's
new high was the fact that volume came in slightly lower than the
average. Normally PHCC trades about 541,000 shares based on a
three-month average, but Friday's high was recorded on volume of
only 491,000. So going into next week we will look for volume to
build as PHCC attempts new highs. Possible entry points might
include a bounce off support at $42.00 or a new move higher to
44.00. We'd like to see volume of 400,000 traded by midday when
considering starting a new position. Additional support exists at
the 5-dma at $41.00, should the consolidation area at $42.00
fail. Look for additional support from the NASDAQ Composite Index
(COMPX) and the CBOE Health Care Index (HCX.X) when considering
starting a new play. We will post a stop loss at $39.00 on this
play.
Picked on March 4th at $42.50
Change since picked 0.00
Stop Loss at $39.00
Chart =
=======
UPDATES
=======
SPLIT RUN PLAY UPDATES 03/04/01
===============================
BAX - Baxter International Incorporated $93.33 (+3.93)
The mapping of the human genome was a giant leap forward for the
biotech industry. Using a DNA recipe to successfully cure a
disease, however, is proving to be a great deal more challenging.
In spite of this, Baxter is finding out that its also a great
deal more rewarding. The company's genetic therapies for life-
hreatening diseases are due to improve earnings by 20% annually
and expand gross profits margins to 60%. This is in stark
contrast to the company's 5% earnings growth it has achieved as a
medical supply business. As for our play, BAX shares kept
climbing on Friday and set a new all time high of $93.48. The leg
up came on fairly good volume of 1,537,400 shares traded and
leads us to believe that there are still plenty of buyers to lift
the stock higher. A positive MACD and higher highs in the OBV
indicator have also helped to confirm the potential for more
gains. So, with that said, we'll expect to see the next key level
of resistance to appear at the $95 mark. Look for a potentially
harder barrier to come at the century mark, which can often times
mark the peak of a rally. Consider using a trailing stop
strategy, should the stock bounce sharply from either of these
levels. Support is at the 5-dma of $91.89 and then at the 10-dma
of $90.70. We'll look for potential entry points to occur when
BAX rallies through resistance or bounces from support on good
midday volume of at least 900,000 shares. Our stop of $89 will
provide us with downside protection.
Picked on March 1st @ $92.61
Change since picked +0.72
Stop Loss @ $89.00
Chart =
===
LTR - Loews Corporation $109.11 (+10.61)
Loews Corporation, a diversified holding company with majority
stakes in CNA Financial Corp., cigarette maker Lorillard, Loews
Hotels, Diamond Offshore Drilling Inc., and watchmaker Bulova
Corp., has posted gains in four of the last five sessions. On
friday, shares of LTR traded to a 52-week high of $111.76 before
pulling back to a close of $109.11 on volume of 559,000 shares.
The stock has made 4 consecutive 52-week highs on strong volume
so it could be ready to challenge its all-time high of $115.62 as
we move closer to the 2:1 split, payable on March 20th. In the
meantime, LTR has support at Friday's intra-day low of $107.80
with additional support at the 5-dma, currently at $106.79.
Resistance has moved up to Friday's intra-day high of $111.76 and
then $113.87, the 11/5/97 intra-day high. A bounce off of $107.80
or a breakout above $111.76 on midday volume of at least 225,000
shares may be possible entry points. Our stops remain at $98.50
to limit potential losses.
Picked on February 27th @ $106.40
Change since picked +2.71
Stop Loss @ $98.50
Chart =
===
GVA - Granite Construction Incorporated $35.20 (+2.13)
GVA, one of the largest heavy civil construction contractors in
the United States, scored a new high of $35.48 this week on
better than twice its normal trading volume. In our write up on
Thursday, we closed our report on GVA by noting that we were
raising the volume requirement to 60,000 traded by midday when
considering opening a new play. Our parameters were easily met on
Friday, as GVA traded on volume of 168,000 well above the three-
month average of 66,000. GVA is one of our split-run plays and is
due to split 3:2 on April 13th. We will now look for a series of
new highs as the stock approaches its ex-date in April. For next
week consider opening a new position in GVA if it bounces off
support at $34.00 or advances further through resistance at
$35.48 on heavy volume. Heavy volume will now be considered
60,000 traded by midday. Additional support exists back at the
20-dma at $32.45. Look for added assistance from the broader
markets when considering starting a new play in GVA. We will
continue to keep a stop loss at $30.50 for now until we get
enough breathing room to ratchet it higher.
Picked on February 25th at $33.07
Change since picked +2.13
Stop Loss at $30.50
Chart =
SPLIT CANDIDATE PLAY UPDATES 03/04/01
=====================================
AYE - Allegheny Energy Incorporated $47.00 (-0.40)
Allegheny's recent agreement to purchase Merrill Lynch's energy-
trading business, Global Energy Markets (GEM), for $490 million
could soon position AYE among the top-10 domestic energy traders
worldwide. Assuming the Federal Energy Regulatory Commission and
the Federal Trade Commission approve the acquisition, the deal
should close by the end of this quarter. Once the buyout is
complete, the combined company will gain better leverage in its
existing physical-power-generation base, and should have combined
capacity of 13,000 megawatts within the next five years. For us,
we're hoping that news of a confirmed buyout, which is due by
month's end, causes shares to regain upward momentum. In order
for this to occur, it is important that the stock holds above
support at either the $47 mark, bolstered by the 20-dma of
$46.72, or at the 30-dma of $46.04, before reaching our stop.
With that said, we'll look for entry points to come from a bounce
off either of these levels or a run through resistance at $49,
when volume reaches at least 350,000 shares traded by mid-day. We
will set our stop level at $45.94 to limit our downside risk.
Picked on February 22nd @ $48.22
Change since picked -1.22
Stop Loss @ $45.94
Chart =
===
IGT - International Game Technology $53.84 (+0.15)
IGT is a dominating presence in the casino world. The company has
long been the leader in the design and manufacture of numerous
electronic casino games and is best known for its innovative slot
machines. IGT has also developed several management systems that
help casinos keep track of accounting, play rates and other
systems that speed up cash transactions. Everything that IGT
does is designed to keep casino patrons happy, stimulated and
plunking more cash into machines. IGT is expected to post
profits of $2.46 a share for the fiscal year of 2001, which ends
in September. If IGT hits these estimates, the company will have
increased their profits more than 39% over its 2000 earnings.
This type of growth from a major company is exceedingly rare
these days. Consequently, investors have been accumulating
shares of IGT ever since September. IGT will report the results
of their most recent quarter on April 19th. IGT is expected to
show profits of $0.62 a share, which would be a huge increase
over $0.34 a share the same quarter a year ago. IGT is also
close to a price that has historically resulted in a split
announcement. IGT's last three 2:1 splits, all in the early
90's, occurred when the stock was trading between $55.25 and
$61.38. IGT weathered last week's tumultuous market quite well.
Resistance at the 52-week high of $55.50 remains within striking
distance. We remain comfortable adding positions in IGT's stock
as long as it stays above the trend line support of $53.00.
Momentum traders may want to jump on board if IGT can establish a
new high with midday volume over 300,000 shares. The MACD is
perilously close to triggering a sell signal, however, a positive
move for the stock on Monday would relieve this problem.
Otherwise, the very strong Money Flow and OBV point towards
continued gains over the intermediate term.
Picked on February 20th @ $53.52
Change since picked +0.32
Stop Loss @ $49.50
Chart =
===
PFGC - Performance Food Group Company $53.69 (+3.56)
Food product manufacturer Performance Food Group Company ran into
some resistance on Friday. Shares of PFGC fell to an intra-day
low of $50.88 before bouncing back to close at $53.69 on
extremely light volume of 45,800 shares. The stock has had a firm
upward trend, but the daily volume has been trending lower,
potentially indicating that PFGC may spend some time
consolidating in the $50-$55 range. However, a positive volume
surge could send the stock into record territory. For now,
support has fallen to the 5-dma at $52.15 with stronger support
at $50.21, the 10-dma. Resistance is holding steady at the
December 29th intra-day high of $55.13 and then the all-time high
of $56.75. Consider starting new plays on a bounce off of $52.15
or a move above $55.13 on volume greater than 100,000 shares by
noon. We are leaving our stops at $47 as downside protection.
Picked on February 25th @ $50.13
Change since picked +3.56
Stop Loss @ $47.00
Chart =
===
PII - Polaris Industries Incorporated $47.20 (-1.61)
This past week Polaris Industries Inc. chose the path of least
resistance and followed the broader markets into negative
territory. Percentage wise, PII, which manufactures and markets a
variety of all-terrain vehicles, suffered much less than the Dow
Jones Industrial Average (INDU) this week but managed to fall
below its base formation nonetheless. The week started off on a
great note when GVA vaulted to a new high on Monday. Tuesday
through Thursday the stock spiraled downward only to end the week
with a bounce and a mild recovery. Friday, GVA gapped down and
found some solid footing just above the 50-dma at $45.00 then
proceeded to climb out of its hole the rest of the session. With
this wide swing in prices, PII put in an "outside" day, meaning
Friday's price bar fully engulfed Thursday's price bar. This is
usually a very bullish sign, so we are encouraged going into next
week. Friday's trading volume was recorded at 114,000 shares or
about 30% higher than the three-month average of 88,000. PII has
been a split candidate for nearly a month now. The company has
23.7 million shares outstanding and 80 million authorized; enough
for a 2:1 or a 3:1 split. There are no scheduled meetings for the
company, but with the number of authorized shares, a split
announcement could be made at any time. For next week possible new
play opportunities might exist if the stock bounces off support at
$46.00 or moves through resistance at $48.00 on heavy volume,
100,000 traded by midday. If support fails, the 50-dma is just
below at $44.50 and should catch the stock from falling further.
We will keep our stop loss at $44.88.
Picked on February 13th at $48.70
Change since picked -1.50
Stop loss at $44.88
Chart =
MOMENTUM PLAY UPDATES 03/04/01
===============================
BDX - Becton, Dickinson and Co. $35.85 (+0.65)
BDX survived a somber week on Wall Street. The company's broad
array of medical products, equipment and services has enabled the
firm to maintain a healthy profit picture while so many other
companies are struggling. Analysts expect BDX to increase its
profits by over 14% in 2001. Lehman Brothers currently rates the
stock a Strong Buy with a year-end target price of $42.00.
Friday's early broad-based selling in the overall market caused
BDX to dip below the short-term support of $35.00. We are
encouraged, however, by the fact that the stock managed to rally
into the close and finish the day above the support level. The
10-DMA provided resistance all last week and now resides at
$36.28. We suggest that a move above $36.50 on midday volume over
700,000 shares could spark a more substantial rally that may lead
to a test the 52-week high of $39.25. The OBV and Money Flow
remain strong. This fact leads us to believe that BDX is simply
in a consolidation phase and that the longer-term trend still
remains positive. The RSI is in neutral territory. This fact
affords the stock plenty of upside potential before an overbought
signal is triggered. New low-risk positions can be entered as
long as BDX can stay above $35.00 on Monday and midday volume
exceeds 400,000.
Picked on February 11th @ $37.03
Change since picked -1.18
Stop Loss @ $34.50
Chart =
===
ELY - Callaway Golf Corporation $25.00 (+1.01)
Manufacturing improvements and reduced labor expenses are helping
to drive Callaway's profit margins to 50% this year. What's more,
the company should also bring in healthy sales numbers, thanks to
the recent launch of two new lines of titanium drivers, the Big
Bertha ERC II and the Hawk Eye VFT. We're pleased with this week's
action in ELY shares. The stock broke through resistance and
managed to tack on 4%. Still, what has really captured our
attention this week has been the volume. The stock's 3-month
average volume is 497,000 shares per day. However, over the past
five days, ELY has logged an average of 854,000 shares, some 70
percent above normal. We feel this is an excellent confirmation of
a momentum breakout and should lead to more near-term gains on the
upside. To that end, we'll look for resistance to come at the 52-
week high of $25.41 and then at the $30 mark. Support comes in at
the $24 mark, bolstered by the 10-dma of $23.92. Traders
considering a position in ELY should look to time their entries
when the stock rises above resistance or bounces swiftly from
support on strong volume of 250,000 shares traded by noon. We'll
limit our downside risk with a stop at $20.
Picked on February 25th @ $23.99
Change since picked +1.01
Stop Loss @ $20.00
Chart =
===
LMT - Lockheed Martin Corp. $38.20 (+1.35)
Lockheed Martin Corporation opened Friday's session in negative
territory on news that NASA has terminated its X-33 space plane
project with LMT. Shares of the aerospace contractor fell below
the 20-dma to an intra-day low of 36.23. However, the stock
bounced back after the Estonian defense ministry agreed to buy
long-distance surveillance radar from Lockheed Martin. LMT ended
the day at a 52-week high of $38.30. The stock has been trending
higher on above average volume over the past month, so it could
continue to rally. Going forward, support has moved up to the 5-
dma at $37.69 with additional support at $36.73, the 20-dma.
Resistance is now up to the 8/23/99 intra-day high of $39.44 and
then the 6/8/99 intra-day high of $41.56. Traders should be
looking for entry points on a bounce off of $37.69 or a breakout
above $39.44 on volume of at least 800,000 shares by noon. Our
stops are holding steady at $35 to limit downside exposure.
Picked on February 4th @ $36.40
Change since picked +1.90
Stop Loss @ $35.00
Chart =
===
TX - Texaco Incorporated $66.84 (+3.79)
Texaco Incorporated finished the week on a high note as plans for
their merger continue to come together. On Friday Texaco, soared
to a new 52-week high after Wall Street received more optimism
regarding their merger with Chevron (CHV). This past week the
proposed merger between Texaco and Chevron received approval from
the European Union (EU) and now awaits the same from the U.S.
antitrust authorities. On Friday a news story from Reuters
announced the following: "Barring unforeseen circumstances Chevron
and Texaco's planned merger should make it past U.S. Antitrust
authorities within three months". If all goes as planned a
completion to the deal would come in early July. Traders responded
favorably to the announcement and shares of TX rose better than 2%
on Friday. The stock closed at a new high of $66.84 that was
achieved on volume of 2.5 million shares, 38% greater volume than
its three-month average of 1.8 million. TX is in a nice position
to move even higher, as merger fever continues to rise. Next week
look for another new high or a quick bounce off of support at
$65.00 when considering a new play in TX. Volume will be a key
component to further gains; we'd look for follow through volume of
at least 1.2 million shares traded by mid-day. Past breakout
volume from TX has exceeded 3 million shares and we should expect
no less here. Additional support from the Dow Jones Industrial
Average (INDU) and the Oil Service Index (OSX.X) would be helpful
as well. We have placed a stop loss on this play at $61.88.
Picked on February 18th at $64.90
Change since picked +1.94
Stop Loss at $61.88
Chart =
=====
DROPS
=====
SPLIT RUN PLAY DROPS 03/04/01
=============================
None
SPLIT CANDIDATE PLAY DROPS 03/04/01
===================================
BJ - BJ's Wholesale Club $44.90 (+0.20)
We had planned to exit this play at the close on Monday.
Unfortunately, the market did not cooperate. The slam-dunk we
saw in the early going on Friday drove BJ below our $44.00 stop.
Those of you that were not stopped out can be encouraged by the
fact that BJ did manage to close only $0.10 below its high print
of the day. An earnings and split anticipation run is still
possible if the broader market stabilizes Monday. BJ is scheduled
to report its quarterly earnings on Tuesday, before the market
opens. Consensus expectations are calling for profits of $0.75 a share.
Picked on February 27th @ $46.49
Profit/Loss -2.49 (5%) (Stopped out Friday @ $44.00)
Best Profit +0.44 (0%)
Chart =
MOMENTUM PLAY DROPS 03/04/01
=============================
BVF - Biovail Corporation $42.00 (-2.17)
Biovail Corporation continued to slide on Friday following Thursday
morning's earnings release. Shares of BVF traded to an intra-day
low of $40.95 on heavy volume of 3.78 million shares. We were
stopped out at $41.50 so we are dropping BVF from our Current
Plays List.
Picked on February 12th @ $46.15
Profit/Loss = -4.65 (-10%) (Stopped out Friday @ $41.50)
Best Profit = +1.59 (+3%)
Chart =
PLAY-OF-THE-DAY
===============
Sunday, March 4, 2001
=============================
BAX - Baxter International Incorporated $93.33 (+3.93)
Sunday's Comment:
The mapping of the human genome was a giant leap forward for
the biotech industry. Using a DNA recipe to successfully cure
a disease, however, is proving to be a great deal more
challenging. In spite of this, Baxter is finding out that its
also a great deal more rewarding. The company's genetic
therapies for life-threatening diseases are due to improve
earnings by 20% annually and expand gross profits margins to
60%. This is in stark contrast to the company's 5% earnings
growth it has achieved as a medical supply business. As for
our play, BAX shares kept climbing on Friday and set a new all
time high of $93.48. The leg up came on fairly good volume of
1,537,400 shares traded and leads us to believe that there are
still plenty of buyers to lift the stock higher. A positive
MACD and higher highs in the OBV indicator have also helped to
confirm the potential for more gains. So, with that said,
we'll expect to see the next key level of resistance to appear
at the $95 mark. Look for a potentially harder barrier to come
at the century mark, which can often times mark the peak of a
rally. Consider using a trailing stop strategy, should the
stock bounce sharply from either of these levels. Support is
at the 5-dma of $91.89 and then at the 10-dma of $90.70. We'll
look for potential entry points to occur when BAX rallies
through resistance or bounces from support on good midday
volume of at least 900,000 shares. Our stop of $89 will
provide us with downside protection.
Picked on March 1st @ $92.61
Change since picked +0.72
Stop Loss @ $89.00
Chart =
================================================================
Weekly Play Results (02/25 - 03/04)
================================================================
Plays Beginning Price Ending Price Gain/Loss % Change
----- --------------- ------------ --------- --------
LMT $36.95 $38.30 $1.35 3.65%
BDK $43.00 $41.00 -$2.00 -4.65%
BVF $44.17 $41.50 -$2.67 -6.04%
PII $48.81 $47.20 -$1.61 -3.30%
TX $63.05 $66.84 $3.79 6.01%
IGT $53.69 $53.84 $0.15 0.28%
AYE $47.40 $47.00 -$0.40 -0.84%
PFGC $50.13 $53.69 $3.56 7.10%
ELY $23.99 $25.00 $1.01 4.21%
GVA $33.07 $35.20 $2.13 6.44%
BJ $46.49 $44.00 -$2.49 -5.36%
LTR $106.40 $109.11 $2.71 2.55%
BAX $92.61 $93.33 $0.72 0.78%
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